Correlation Between SUNCOKE ENERGY and Dow Jones
Can any of the company-specific risk be diversified away by investing in both SUNCOKE ENERGY and Dow Jones at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SUNCOKE ENERGY and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SUNCOKE ENERGY and Dow Jones Industrial, you can compare the effects of market volatilities on SUNCOKE ENERGY and Dow Jones and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SUNCOKE ENERGY with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUNCOKE ENERGY and Dow Jones.
Diversification Opportunities for SUNCOKE ENERGY and Dow Jones
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SUNCOKE and Dow is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding SUNCOKE ENERGY and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and SUNCOKE ENERGY is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SUNCOKE ENERGY are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of SUNCOKE ENERGY i.e., SUNCOKE ENERGY and Dow Jones go up and down completely randomly.
Pair Corralation between SUNCOKE ENERGY and Dow Jones
Assuming the 90 days trading horizon SUNCOKE ENERGY is expected to generate 3.82 times more return on investment than Dow Jones. However, SUNCOKE ENERGY is 3.82 times more volatile than Dow Jones Industrial. It trades about 0.07 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 817.00 in SUNCOKE ENERGY on September 5, 2024 and sell it today you would earn a total of 383.00 from holding SUNCOKE ENERGY or generate 46.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
SUNCOKE ENERGY vs. Dow Jones Industrial
Performance |
| Timeline |
SUNCOKE ENERGY and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
SUNCOKE ENERGY
Pair trading matchups for SUNCOKE ENERGY
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with SUNCOKE ENERGY and Dow Jones
The main advantage of trading using opposite SUNCOKE ENERGY and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUNCOKE ENERGY position performs unexpectedly, Dow Jones can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Dow Jones will offset losses from the drop in Dow Jones' long position.| SUNCOKE ENERGY vs. TOTAL GABON | SUNCOKE ENERGY vs. Walgreens Boots Alliance | SUNCOKE ENERGY vs. Peak Resources Limited |
| Dow Jones vs. Shake Shack | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. Dave Busters Entertainment | Dow Jones vs. Meli Hotels International |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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